Korean Co Takes Aim At Display Patents

LG Electronics 3D OLED televisions on display at the 2011 International Consumer Electronics Show in Las Vegas.

A legal challenge by South Korean firm Duksan Hi-Metal Co. to patents held by U.S.-based Universal Display Corp. for flat display technology could potentially accelerate the development of advanced screens for everything from cell phones to televisions in Korea.

The key challenge is to a patent held by Nasdaq-listed UDC in Korea for phosphorescent materials used in organic light-emitting diode, or OLED, panels. The materials boost the brightness and energy efficiency of OLED panels, which are expected to increasingly supplant liquid-crystal displays. OLED screens require less power than conventional LCDs, have clearer picture quality and a faster response time.

UDC’s patents mean that Korean OLED makers such as Samsung Mobile Display, a unit of conglomerate Samsung Group, and LG Display, the panel-making unit of LG Group, have to pay substantial royalties to the U.S. company. Duksan Hi-Metal is taking legal action because it is blocked from producing phosphorescent materials as a result of the patents held by UDC.

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Duksan’s legal challenge comes after two OLED patents over the phosphorescent materials held by UDC were invalidated in Japan following a court ruling there, and as other companies are seeking similar action to scrap UDC patents in Europe. UDC says it will appeal the Japanese ruling and emphasizes that other patents remain valid and enforceable.

Duksan says that UDC wasn’t the first to use phosphorescent materials commercially.

“Some studies show that phosphorescent materials were being widely used even before the technology was patented (by the UDC), and as the technology isn’t something new, their patent ownership should be invalidated,” said Yu Han-sung, chief technology officer at Duksan.

In response to the Duksan case, UDC said its patents in Korea were “properly issued.”

A ruling in Duksan’s favor by the Korea Intellectual Property Tribunal could provide a fillip for the OLED industry in Korea and speed up the development of more advanced displays with phosphorescent materials.

“If the relevant patents are invalidated, it will open doors for Korean materials makers to tap into the premium OLED materials market and will also help the AM OLED (Active-matrix OLED, a technology that allows for higher resolution and larger displays) materials market grow faster,” said an official at Samsung Mobile Display.